value situations14 Mar 2022 13:48
PANR announced last week that it has elected to pay the quarterly principal and interest due on it its convertible bond by issuing new shares, as permitted under the bond agreement (PANR has the choice of paying quarterly repayments in cash or by issuing new shares).
The total cash payment due for the quarter is $3.3m, comprising $2.75m of principal and $0.55m in interest.
The exact number of shares to be issued is TBC but based on my initial calculations, PANR will issue ~3.2m shares to bond investor Heights Capital Ireland, with negligible dilution of ~0.4%, as follows:
Under the bond terms, if PANR elects to pay in shares, the number of shares to be delivered will be calculated by dividing the payment due by the conversion price prevailing on the coupon payment date
In this instance the conversion price is defined as the Initial Conversion Price, which is the previous equity fundraise issue price of £0.65 plus a 20% premium, or £0.78, which equates to $1.022 at current FX
A total repayment of $3.3m divided by $1.022 share price equals 3,229,595 new shares to be issued
With a current ordinary share count of 753,743,733, the new issuance to the bondholder will result in ~0.4% dilution to existing shareholders.
We can probably expect future bond repayments to be via shares also, given the focus on funding and proving PANR’s assets with a view to a sale. In any event, this has little bearing on my previous valuation analysis which estimated a risked value of ~£3.44/share on a fully diluted basis, after full conversion of the convert bond.
PANR is up ~98% since I first published the idea last September.
Sign In
Follow the stocks
